Wanjiao Jia, Shuoshuo Bi and Yingjie Du
This study analyses Chinese data to revisit the relationship between directors’ and officers’ (D&O) insurance and accounting conservatism, aiming to investigate the impact of…
Abstract
Purpose
This study analyses Chinese data to revisit the relationship between directors’ and officers’ (D&O) insurance and accounting conservatism, aiming to investigate the impact of investors’ legal protection on the function of D&O insurance.
Design/methodology/approach
The study sample included all A-share firms listed on the Shanghai and Shenzhen Stock Exchanges from 2006 to 2019. Multiple regression was used to investigate the association between D&O insurance and accounting conservatism. The Heckman two-stage model and the propensity score matching method were used to check the robustness of the main results.
Findings
D&O insured companies exhibited greater accounting conservatism. The higher the indemnity limit, the more conservative a firm’s earnings reporting. The positive correlation was stronger when investor protection was relatively weak. The impact of D&O insurance on accounting conservatism was stronger for companies with weaker internal or external supervision mechanisms.
Originality/value
The study findings show that D&O insurance plays a positive role in the governance of listed companies when investors’ legal protection is weak, which supports the effective supervision hypothesis of D&O insurance.
Details
Keywords
Hazard warning schemes provide efficient hazard recognition and promote project safety. Nevertheless, these schemes perform poorly because the warning information is calibrated…
Abstract
Purpose
Hazard warning schemes provide efficient hazard recognition and promote project safety. Nevertheless, these schemes perform poorly because the warning information is calibrated for individual characters and is not prioritized for the entire system. This study proposes a hazard warning scheme that prioritizes hazard characters from the inspection process based on the inspectors' experience.
Design/methodology/approach
First, hazard descriptions were decomposed into their characters, forming a double-layer network. Second, warning schemes based on cascading effects were proposed. Third, character-based warning schemes were simulated for various experiences.
Findings
The results show that when a specific hazard is detected, the degree centrality is the most effective parameter for prioritization, and hazard characters should be prioritized based on betweenness centrality for experienced inspectors, whereas degree centrality is preferred for novice inspectors.
Originality/value
The warning scheme theoretically supplements the information-processing theory in construction hazard warnings and provides a practical warning scheme with priority for the development of automated hazard navigation systems.